While some dairy producers eked out a profit during the first half of 2021, others in the western U.S. even lost money. That situation reversed itself in the first half of 2022 as the farms working with Frazer Certified Public Accountants and Consultants generated steady income from milking cows.
On the most positive note, milk check income rose between $7.06 and $7.81 per hundredweight (cwt.) when comparing the first half of 2022 to the first six months of the previous year. That was based on a range of $24.74 to $27.47 for shipped milk in 2022 compared to $17.68 to $19.66 in milk check revenue for 2021 across the eight regions in the Frazer report.
On the other side of the ledger, feed prices dug deep into the additional revenue. Feed costs climbed from $3.07 to $3.54 per cwt. in the first half of 2022. Overall feed expenses ranged from $14.86 to $12.56 per cwt. in the first half of 2022. In contrast, feed costs were a milder $9.49 to $11.32 just one year earlier for the accounting firm that does work for dairy operations that collectively milk nearly 300,000 cows.
In order to gain a better understanding of cash flows, let’s compare the first half of 2021 to the first half of 2022 based on date from Frazer LLP:
- Southern California: With a $27.05 milk price, the herds generated $27.58 total revenue per cwt. from operations. Feeds costs averaged $14.42, and expenses totaled $22.74. Income from operations netted $4.84 per cwt. When compared to 2021, the milk price was $19.66 per cwt. and total farm revenue was $20.25 per cwt. Feed costs averaged $11.32, and expenses totaled $18.96. That netted $1.29 per cwt. in revenue through the first six months of 2021.
- San Joaquin Valley of California: With a $26.09 milk price, the herds generated $26.72 total revenue per cwt. from operations. Feed costs averaged $12.56, and expenses totaled $20.86. Income from operations netted $5.86 per cwt. When compared to 2021, the milk price was $17.82 per cwt. and total farm revenue was $18.25 per cwt. Feed costs averaged $10.45, and expenses totaled $18.27. That yielded a 2-cent loss per cwt. through the first six months of 2021.
- Kern County California: With a $26.43 milk price, the herds generated $27.43 total revenue per cwt. from operations. Feed costs averaged $14.86, and expenses totaled $22.62. Income from operations netted $4.81 per cwt. When compared to 2021, the milk price was $18.16 per cwt. and total farm revenue was $18.38 per cwt. Feed costs averaged $11.14, and expenses totaled $18.32. That netted a 6-cent per cwt. return through the first six months of 2021.
- Arizona: With a $26.01 milk price, the herds generated $27.16 total revenue per cwt. from operations. Feed costs averaged $13.50, and expenses totaled $22.65. Income from operations netted $4.51 per cwt. When compared to 2021, the milk price was $17.72 per cwt. and total farm revenue was $19.04 per cwt. Feed costs averaged $10.65, and expenses totaled $18.80. That netted a 24-cent per cwt. gain through the first six months of 2021.
- Idaho: With a $26.31 milk price, the herds generated $26.83 total revenue per cwt. from operations. Feed costs averaged $12.63, and expenses totaled $21.82. Income from operations netted $5.01 per cwt. When compared to 2021, the milk price was $18.56 per cwt. and total farm revenue was $18.99 per cwt. Feed costs averaged $9.49, and expenses totaled $17.90. That netted a $1.09 per cwt. gain through the first six months of 2021.
- New Mexico: With a $24.74 milk price, the herds generated $24.83 total revenue per cwt. from operations. Feed costs averaged $13.19, and expenses totaled $20.97. Income from operations netted $3.86 per cwt. When compared to 2021, the milk price was $17.68 per cwt. and total farm revenue was $17.81 per cwt. Feed costs averaged $10.42, and expenses totaled $18.54. That yielded a 73-cent loss per cwt. through the first six months of 2021.
- Texas Panhandle: With a $25.22 milk price, the herds generated $26.13 total revenue per cwt. from operations. Feed costs averaged $12.95, and expenses totaled $21.87. Income from operations netted $4.26 per cwt. When compared to 2021, the milk price was $19.35 per cwt. and total farm revenue was $20.05 per cwt. Feed costs averaged $11.18, and expenses totaled $19.83. That netted a 22-cent gain per cwt. through the first six months of 2021.
- Pacific Northwest (Oregon and Washington): With a $27.47 milk price, the herds generated $28.07 total revenue per cwt. from operations. Feed costs averaged $13.06, and expenses totaled $23.56. Income from operations netted $4.51 per cwt. When compared to 2021, the milk price was $21.21 per cwt. and total farm revenue was $21.72 per cwt. Feed costs averaged $10.47, and expenses totaled $21.79. That yielded a 7-cent loss per cwt. through the first six months of 2021.
